In vertebrate embryos, neural crest cells emerge from the dorsal neural tube and migrate along well defined pathways to form a wide diversity of tissues, including the majority of the peripheral nervous system (PNS). Members of the cadherin family of cell adhesion molecules play key roles during the initiation of migration, mediating the delamination of cells from the neural tube. However, a role for cadherins in the sorting and re-aggregation of the neural crest to form the PNS has not been established. We report the requirement for a protocadherin, chicken protocadherin-1 (Pcdh1), in neural crest cell sorting during the formation of the dorsal root ganglia (DRG). In embryos, cPcdh1 is highly expressed in the developing DRG, where it co-localizes with the undifferentiated and mitotically active cells along the perimeter. Pcdh1 can promote cell adhesion in vivo and disrupting Pcdh1 function in embryos results in fewer neural crest cells localizing to the DRG, with a concomitant increase in cells that migrate to the sympathetic ganglia. Furthermore, those cells that still localize to the DRG, when Pcdh1 is inhibited, are no longer found at the perimeter, but are instead dispersed throughout the DRG and are now more likely to differentiate along the sensory neuron pathway. These results demonstrate that Pcdh1-mediated cell adhesion plays an important role as neural crest cells coalesce to form the DRG, where it serves to sort cells to the mitotically active perimeter.